The report, conducted by the National Consumer Law Center, said that since Sept. 11, 2001, more and more employers have conducted background checks on prospective hires -- creating a booming industry of Internet companies that cull public information databases for employers.

But the results are often pockmarked with errors.

"Background screening companies routinely cut corners to improve their profits and then they wipe their hands of any responsibility for producing an inaccurate or misleading report that can cost a worker his or her job," wrote Persis Yu, the report's co-author.

According to the report, one man was allegedly denied a job after a prospective employer ran a background check, which returned a 1987 rape conviction. The man, Samuel M. Jackson, was 4 in 1987. The rape conviction was for a man named Samuel L. Jackson, who was incarcerated at the time the report was run.

Situations like Jackson's have become much more common as more background checks are performed, the report found.

Among other problems are that reports sometimes contain sealed or expunged information or omit information on how a case was resolved. A person who was arrested, for example, may have been found innocent -- but that outcome is not contained in the report.

The report's authors also gave recommendations on how to fix the problem. They urge the Consumer Financial Protection Bureau to draw up regulations to ensure background checks are accurate and to require agencies to register with the agency so consumers can correct false or misleading information.

They also urge the Federal Trade Commission to investigate the many companies that employers use to make sure they are not violating the Fair Credit Reporting Act, a federal law that protects consumers from false information in credit reports.